MK Khenin: Antitrust Commissioner’s Resignation – Victory for Gas Tycoons & Their Puppets in the Government

Antitrust Authority director general Prof. David Gilo yesterday, May 25, announced his resignation, after the cabinet approved an arrangement for the natural gas industry which Gilo regards as improper. Gilo said, “My decision is a result of a number of considerations, most importantly the report that the cabinet, particularly the Prime Minister’s Office, the Ministry of Finance, and the Ministry of National Infrastructure, Energy, and Water Resources, will do everything they can to push forward the currently emerging structure in the natural gas sector. I am convinced that such a structure will not lead to competition in this important market, and could possibly detract from the independence of the Antitrust Authority, a matter of public importance, and harm its ability to carry out unilateral measures.”

Drilling platform at the Tamar natural gas field

Drilling platform at the Tamar natural gas field (Photo: Delek Energy)

Gilo added, “In recent week, I notified the gas partnership and the other government departments that I could not be a party to the recently formulated structure, because I was convinced that it would not lead to competition in the natural gas market.”

Gilo was referring to a compromise outline presented two weeks ago to natural gas firms the Delek Group, owned by local oligarch Yitzhak Tshuva and American Noble Energy by an inter-ministerial team – from the Finance Ministry, the National Economic Council, and the National Infrastructure, Energy and Water Ministry – aimed at solving an ongoing dispute that has largely frozen new gas development since December. The stalemate stems from Gilo’s December 23, 2014 declaration that he would review whether the dominance of Delek and Noble in the Mediterranean gas sector constitutes an illegal “restrictive arrangement.” The recent compromise outline, which government officials said was received favorably by the companies, requires that the Delek Group’s subsidiaries – Delek Drilling and Avner Oil Exploration – exit the Tamar reservoir entirely, selling their assets there within six years. Houston-based Noble Energy would only need to dilute its assets from its 36-% share today to 25%, and could remain the basin’s operator.

Joint List MK Dov Khenin (Hadash), a frequent critic of the extreme right Israel government’s agreement with the gas companies, called Gilo’s announcement a “blow to the Israeli public.” MK Khenin slammed the Netanyahu government for catering to large companies and said Gilo’s decision to step down was “the result of a violent pressure campaign by the gas tycoons and their puppets in the government.” “Instead of backing the brave and determined Gilo, the prime minister threw him to the dogs and gave [gas tycoon Yitzhak] Tshuva inconceivable economic and political power,” stated MK Khenin.

Gilo’s resignation “is a mark of shame for the government, and especially for its head,” The Movement for Quality Government in Israel said in a statement. His resignation spells the end of chances for competition in the gas sector and the government’s campaign to protect the oil barons from Gilo’s stance represents a real danger to democracy in Israel, the group said.